UK’s better-than-expected April wage growth weighs on gilt prices; BoE MPC members’ speeches eyed

The United Kingdom’s gilts suffered during European session Tuesday following a better-than-expected growth in the country’s average wages for the month of April, ahead of a host of speeches by Monetary Policy Committee (MPC) members Saunders, Tenreyro and Broadbent, scheduled for later in the day.

The yield on the benchmark 10-year gilts, jumped nearly 3 basis points to 0.868 percent, the super-long 30-year bond yields rose 2 basis points to 1.439 percent and the yield on the short-term 2-year also traded 3-1/2 basis points higher at 0.591 percent by 10:20GMT.

Britain’s labour market performed better than what market participants had initially anticipated in the three months through April, which may further cement the hawkish comments coming from the Bank of England about interest-rate hikes.

The number of people in work rose a greater-than-forecast 32,000 and basic pay growth unexpectedly accelerated to 3.4 percent, according to data released by the Office for National Statistics on Tuesday; unemployment stayed at a 44-year-low of 3.8 percent.

Meanwhile, the FTSE 100 remained tad 0.46 percent higher at 7,410.25 by 10:25GMT, while at 10:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bullish at 102.86 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex